Unions gun for labour hire ring-ins

By Helen Trinca, extract from Sydney Morning Herald,
22 May 1999

The Australian Services Union is trying to strike agreements with labour hire firms for members it doesn't yet have.

It is an alternative approach forced on unions in an age when they are struggling to recruit members from an increasingly fragmented labour market.

We're trying to organise, but you strike problems in this area for obvious reasons, Mr Brian Sullivan, the union's national executive president, said yesterday. People are scattered all over the city and there is no consolidated workplace. For some unions it goes against the grain dealing with the employer ahead of the employees, but we believe we have to do it.

The union is trying to recruit members in one of the fastest growing areas of labour hire - the phone call centres - where about 30 per cent of workers are employed via labour hire firms.

The Recruitment and Consulting Services Association, which has 300 member companies in NSW, has been unmoved by the pressure. Instead, the association wants the union to negotiate directly with the hire companies.

Labour hire companies estimate they employ fewer than 2 per cent of Australian workers but the sector has been growing at 16 per cent each year since 1980.

The number of agency workers doubled in Australia between 1990 and 1995.

The labour hire firms now cover the so-called blue, white, pink and gold collar workers - everything from manufacturing workers in blue to to managing directors in gold class. Pink is for the clerical area dominated by women and white covers professionals like information technology workers. The industry has an annual turnover nationally of $4.5 billion with about 40 per cent of that in NSW. The big unions, such as the Construction Forestry Mining and Energy Union, are dismissive of the body hire companies and the CFMEU is pushing for clauses in enterprise agreements to limit the use of these workers. Mr John Buchanan, a researcher with Sydney University's Australian Centre for Industrial Relations Research and Training, says the labour market is being reconfigured by outsourcing. Between 1990 and 1995, 35 per cent of employers had outsourced at least one function.

In the early 1980s, about two-thirds of workers were in companies of 100 workers or more, whereas a decade later this had dropped to about 50 per cent. The NSW Labor Council is campaigning to regulate contractors and is behind a push to change laws so the State Industrial Commission sets minimum rates for contractors and to ensure that labour hire firms do not undercut other site workers. The ideas are in a discussion paper from the NSW Industrial Relations Department. The Premier, Mr Carr, dumped on the paper after it was leaked to the Herald but this week, his office said he was ruling nothing in or out. He just wants normal consultation to be followed.

The Labor Council secretary, Mr Michael Costa, says: We're concerned at the undermining of the notion of full-time employment. All of the statistics show very clearly that full-time employment is declining and one of the reasons is the artificial contracting to avoid the employer-employee relationship. The NSW Employers Federation accused the council of trying to turn back the clock but the labour hire companies say they have no problem with paying the same money paid to unionists on site, arguing they sometimes pay more already. The real issue in this style of work is not so much money but job security.

But the trend is likely to be hard to break. Mr Jim Dingwall, a management consultant with PA Consulting Group, said the European experience showed that forcing labour hire firms to maintain parity with site wages did not dampen the enthusiasm for outsourcing. Employers were using contract workers for flexibility and to implement cultural change in the workplace, not as a way of cutting wages, he said.